The Northwest Passage and the future of shipping routes

This is the real Cold War. President Obama recently visited Alaska and his message is clear. He wants to accelerate by two years plans to acquire a new icebreaker and will ask Congress for money to build additional ones for the Coast Guard. Eyes are looking in the same direction: will the Northwest Passage be the future of the shipping routes?

The answer is probably yes. As you already know, the Northwest Passage links the Pacific with the Atlantic Ocean. It’s a cold shortcut, not very convenient until global warming started to reduce the extent of the area’s ice in the summer. If only 4 ships made trips every year during the 80`s, nowadays, the figure is much higher, around 20-30.

A hypothetical and more than probable year round passage through the Arctic would make shipping routes much shorter , boosting shipping between northwest Europe and important Asian countries, propelling ocean freight transportation to Shanghai and other important hubs. And there’s more, this route, which skirts the top of Alaska and Canada, is estimated to be 30 percent cheaper than hauling goods via the Panama Canal ocean freight route.

Another possible advantage from the new trade route would be its impact on the environment . Ships will burn far less fuel, because they will not need to travel as far to reach their destinations. But… at the same time, trade could increase because of the shorter route, so the impact on the environment… still big.

The northern sea route would also alter world trade by making northern countries richer, but causing problems for countries like Egypt because less traffic would come through the Suez Canal. Who knows? With all these possibilities on the table, one thing is clear: the Arctic is a game changer and its economic and political importance can have a big impact.

The U.S is aware of this potential and President Obama knows that we have fallen behind other nations, especially Russia, which already possesses 40 icebreakers. Yes, it’s definitely the new Cold War, because the big melt is also revealing natural resources like fish, oil or gas (fuels are the second top U.S export), creating a double-edged sword with new tactical and security problems. And the competition turns into a race among the eight countries with territory in the Arctic.

In the meanwhile, a U.S.-flagged cruise ship, the Crystal Serenity, plans to take more than 1,000 passengers through the passage next summer. Something is changing. The United States never expected this when we purchased Alaska from the Russians 150 years ago.